Goods and Services
Scarcity
4 Factors
Production
Circular Flow
100
What is a physical item that satisfies a need or want
a good
100
Items/services that are necessary for survival
Needs
100
What factor of production deals with things in the natural environment?
Land
100
What is an opportunity cost?
cost of the next best alternative
100
What is human capital?
sum of the skills, abilities, health, and motivation of people
200
What do we call work that is performed for someone
A service
200
Items/services that are desired for satisfaction
Wants
200
What factor of production describes the use of capital goods?
Capital
200
What is productivity?
measure of the amount of output produced by a given amount of inputs in a specific time period
200
What are some "inputs" in the circular flow model?
Land, labor, capital, and entrepreneurship
300
What is a non-durable good
A good we plan on lasting LESS than 3 years
300
What are the 3 basic economic questions?
1. What to Produce
2. How to Produce
3. For whom to produce
300
What factor of production describes the need for human work?
Labor
300
How can you expand your production possibilities?
Increase your input (supply of the factors of production), improved technology, more efficient production
300
What are the two markets in the Circular Flow Diagram?
Resource (of Factor) Market and the Product Market
400
Give one example of a consumer good and one example of a capital good.
Consumer goods are: food, toothbrushes, clothes etc
Capital goods are: tools, equipment, factories, etc
400
What is the paradox of value?
Goods/services essential to life (water) should be cheaper than non-essential goods (diamonds)
400
What are entrepreneurs?
The mind behind the madness, the risk-taker who is in search of profit
400
What does the Red Curved Line Represent?
The red curve represents how much an economy can produce when all productive resources are fully employed.
400
How are specialization and division of labor different?
Specialization involves a worker doing only one task, division of labor involves workers doing different tasks to create a good or provide a service
500
Is a refrigerator a durable or non-durable good?
A durable good
500
What is the fundamental problem in economics?
We can't have everything we want so we are forced to choose what we want the most
500
True or False
Production of goods and services CAN happen even if one of the factors is missing
FALSE
500
What does D represent, and what does C represent?
YOU MUST ANSWER BOTH QUESTIONS
Letter D represents less than maximum production or production inefficiency
Letter C represents exceeding available resources. Production not possible
500
How are the 2 markets of the Circular Flow Diagram different?
The Resource/Factor Market is where the 4 Factors of Production are sold, the Product Market is where goods & services are sold